Understanding how property acquired (matrimonial asset pool) during a relationship will be divided from a Family Law perspective is a difficult one.
It is therefore imperative to understand the process by which the courts conduct an assessment in determining the division of property and by extension how a lawyer will approach your unique situation.
Notionally, this process is a ‘four step process’. The concept is best summarised as follows
- The court identifies and value of property. [At this stage you must request full and frank disclosure of financial documents to determine the matrimonial asset pool]. All property must be taken into account, whether individually or jointly held and whether acquired before or during the relationship. Property includes assets, real property, superannuation, financial resources and of late includes shares and cryptocurrency.
- Determine, based on instructions from the client, both financial and non-financial contributions. Financial contributions may be income and wages, property acquisition, assets brought to the relationship, inheritances, or loans. Non financial contributions include caring for children, homemaking, housework, parenting responsibilities such as extra curricula activities etc. This is not a limited list and care should be taken to take detailed instructions from the client. This step is purely based on the evidence from both parties. In the event the parties cannot agree on a value of an asset, the parties will need to engage valuers to prepare a valuation for the court.
- Assess the future needs of both parties by considering age, health, earning capacity and consider arrangements in respect of any children from the relationship. This is not a limited to these factors and turns on the facts of each case. Some examples are:
- The age and health of the parties.
- The income, property and financial resources of the parties.
- The physical and mental capacity of the parties to obtain gainful employment.
- Whether either of the parties has primary care of a child under the age of 18.
- Whether the parties have any commitments or responsibility to support themselves or any dependents.
- Whether the parties are eligible for a pension or other benefit.
- The standard of living of the parties.
- The extent to which payment to a party might enable that party to increase their earning capacity through training or education.
- The effect of any Order on the ability of a creditor of a party to recover the creditor’s debt.
- The extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party.
- The duration of the marriage and the extent to which it has affected the earning capacity of the parties.
- The need to protect a party who wishes to continue their role as a parent.
- If either party is living with another person, the financial circumstances of that arrangement.
- Any Orders made under Section 79 of the Family Law Act.
- Any child support either party is liable to pay.
- Any other fact or circumstances which, in the opinion of the Court, the justice of the case requires consideration.
- The terms of any financial agreement or binding financial agreement the parties have entered into.
- Lastly determine whether the proposed percentage split and allocation of assets within the pool is fair.
The law has since developed in particular following the High Courts determination in Stanford v Stanford [HCA] 52. To understand the implications of this decision, it important to highlight that the steps described above create alternations in ownership and/or transference of property. The identified assets, based on their values are, based on several factors influence the ownerships of that asset. Stanford takes this step further by introducing a fifth step, that is, whether it is appropriate to divide property at all. Arguably, this ought to be the first step. In most cases, this step is nearly always satisfied. Some examples where it may not be just and equitable to alter interest in property is where it has been a short relationship or whether one party has not contributed to the property held by the other party. Accordingly, the five steps are as follows (using the steps described above):
- It is just and equitable to make an adjustment to the parties’ property interests. If the parties have separated voluntarily and will no longer enjoy the common use of their assets then it will just and equitable for interests to be adjusted.
- Identity and value property
- Consider financial and non financial contributions
- Assess the future needs of the parties
- Consider the practical effect of the proposed division and whether it is just and equitable in the circumstances.
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At Quill Legal we innovate, educate, and plan to evoke excellence and confidence. Our principal solicitor, Shams, and his team are focused on delivering an honest, first-class service. With Quill legal by your side, you have lawyers who will passionately listen, advise and advocate your rights from start to finish.
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